NOTE 4 – LONG-TERM DEBT, CREDIT ARRANGEMENTS AND GUARANTEES

Long-Term Debt

Details on long-term debt at June 30, 2012, June 30, 2011 and December 31, 2011 are shown below ($ Millions):


	June 30,				December 31,
	2012		2011		2011
Unitil Corporation Senior Notes:
6.33% Notes, Due May 1, 2022	$	20.0	$	20.0	$	20.0

Unitil Energy Systems, Inc.:
First Mortgage Bonds:
5.24% Series, Due March 2, 2020		15.0		15.0		15.0
8.49% Series, Due October 14, 2024		15.0		15.0		15.0
6.96% Series, Due September 1, 2028		20.0		20.0		20.0
8.00% Series, Due May 1, 2031		15.0		15.0		15.0
6.32% Series, Due September 15, 2036		15.0		15.0		15.0

Fitchburg Gas and Electric Light Company:
Long-Term Notes:
6.75% Notes, Due November 30, 2023		19.0		19.0		19.0
7.37% Notes, Due January 15, 2029		12.0		12.0		12.0
7.98% Notes, Due June 1, 2031		14.0		14.0		14.0
6.79% Notes, Due October 15, 2025		10.0		10.0		10.0
5.90% Notes, Due December 15, 2030		15.0		15.0		15.0

Northern Utilities Senior Notes:
6.95% Senior Notes, Due December 3, 2018		30.0		30.0		30.0
5.29% Senior Notes, Due March 2, 2020		25.0		25.0		25.0
7.72% Senior Notes, Due December 3, 2038		50.0		50.0		50.0

Granite Senior Notes:
7.15% Senior Notes, Due December 15, 2018		10.0		10.0		10.0

Unitil Realty Corp.:
Senior Secured Notes:
8.00% Notes, Due Through August 1, 2017		3.1		3.6		3.3

Total Long-Term Debt		288.1		288.6		288.3
Less: Current Portion		0.5		0.5		0.5

Total Long-term Debt, Less Current Portion	$	287.6	$	288.1	$	287.8

Fair Value of Long-Term Debt – Currently, the Company believes that there is no active market in the Company’s debt securities, which have all been sold through private placements. If there were an active market for the Company’s debt securities, the fair value of the Company’s long-term debt would be estimated based on the quoted market prices for the same or similar issues, or on the current rates offered to the Company for debt of the same remaining maturities. The fair value of the Company’s long-term debt is estimated using Level 2 inputs (valuations based on quoted prices available in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, inputs other than quoted prices that are directly observable, and inputs derived principally from market data.) In estimating the fair value of the Company’s long-term debt, the assumed market yield reflects the Moody’s Baa Utility Bond Average Yield. Costs, including prepayment costs, associated with the early settlement of long-term debt are not taken into consideration in determining fair value.


(Millions)	June 30,				December 31,
	2012		2011		2011
Estimated Fair Value of Long-Term Debt	$	341.6	$	323.0	$	338.7

Credit Arrangements

Unitil has a revolving credit facility with a group of banks that extends to October 8, 2013. Effective July 24, 2012, Unitil reduced the borrowing limit under its revolving credit facility from $115 million to $60 million. The new $60 million borrowing limit reflects reduced borrowing needs as a result of the recent repayment of short-term debt with the proceeds of the Company’s public equity offering in May 2012.

The following table details the borrowing limits, amounts outstanding and amounts available under the revolving credit facility as of June 30, 2012, June 30, 2011 and December 31, 2011:


	June 30,				December 31,
Revolving Credit Facility (Millions)	2012		2011		2011
Limit	$	115.0	$	80.0	$	115.0
Outstanding	$	5.0	$	51.3	$	87.9
Available	$	110.0	$	28.7	$	27.1

The revolving credit facility contains customary terms and conditions for credit facilities of this type, including, without limitation, covenants restricting the Company’s ability to incur liens, merge or consolidate with another entity or change its line of business. The revolving credit agreement also contains a covenant restricting the Company’s ability to permit funded debt to exceed 65% of capitalization at the end of each fiscal quarter. As of June 30, 2012, June 30, 2011 and December 31, 2011, the Company was in compliance with the financial covenants contained in the revolving credit agreement.

Northern Utilities enters into asset management agreements under which Northern Utilities releases certain natural gas pipeline and storage assets, resells the natural gas storage inventory to an asset manager and subsequently repurchases the inventory over the course of the natural gas heating season at the same price at which it sold the natural gas inventory to the asset manager. There were $8.0 million, $6.6 million and $14.9 million outstanding at June 30, 2012, June 30, 2011 and December 31, 2011, respectively, related to these asset management agreements. There were no amounts of natural gas inventory released in June 2012 and payable in July 2012 that were recorded in Accounts Payable at June 30, 2012. There were no amounts of natural gas inventory released in June 2011 and payable in July 2011 that were recorded in Accounts Payable at June 30, 2011. The amount of natural gas inventory released in December 2011, which was payable in January 2012, is $2.5 million and recorded in Accounts Payable at December 31, 2011.

Guarantees

The Company also provides limited guarantees on certain energy and natural gas storage management contracts entered into by the distribution utilities. The Company’s policy is to limit the duration of these guarantees. As of June 30, 2012, there were approximately $20.6 million of guarantees outstanding and the longest term guarantee extends through February 2014.

The Company also guarantees the payment of principal, interest and other amounts payable on the notes issued by Unitil Realty and Granite State. As of June 30, 2012, the principal amount outstanding for the 8% Unitil Realty notes was $3.1 million, and the principal amount outstanding for the 7.15% Granite State notes was $10.0 million.